Client Alert Proposed Legislation is Latest Sign of Potential Changes to the CFIUS Process
Summary: Earlier this year, the US District Court of Appeals for the District of Columbia Circuit ruled that Chinese-owned Ralls Corporation was denied due process of law when its wind farm investment was blocked. Unless appealed to the US Supreme Court and overturned, the ruling would require more transparency for parties in at least some Committee on Foreign Investment in the United States (CFIUS) reviews and could lead to additional litigation. More recently, Representative Rosa DeLauro (D-CT), one of the opponents of Shuanghui International Holdings Limited’s 2013 acquisition of Smithfield Foods, Inc., introduced legislation that would significantly expand the scope and role of CFIUS. This is the first bill seeking to substantially change the CFIUS process since the Foreign Investment and National Security Act of 2007 (FINSA) overhauled CFIUS following the Dubai Ports World transaction. In the context of the markedly evolving nature of CFIUS transactions, these developments indicate that the process and scope of CFIUS reviews may significantly change for the first time since FINSA was passed in 2007.